Texas utility regulators have two days to answer the governor. The Public Utility Commission and the Electric Reliability Council of Texas must deliver a joint memorandum to Gov. Greg Abbott by July 17 spelling out how they will shield residential and small-business ratepayers from the cost of building infrastructure for the state’s data-center boom.
The deadline flows from a June 10 directive in which Abbott ordered the two agencies to ensure “data centers pay for all electric infrastructure costs so residential ratepayers are not burdened.” His letter to PUC Chairman Thomas Gleeson and ERCOT CEO Pablo Vegas instructs them to summarize actions already available under existing authority, identify statutory limits, and recommend legislation.
The memo is only the first step: Abbott directed the PUC to open a formal proceeding by July 31 to reduce the transmission charges residential customers now pay, a line item that makes up a significant share of a monthly electric bill.
The push lands as the scale of demand comes into focus. ERCOT is tracking more than 438 gigawatts of large-load interconnection requests, nearly 90% of them from data centers, according to Utility Dive — a queue several times the grid’s current peak.
To sort real projects from speculative ones, the PUC on June 18 approved ERCOT’s “Batch Zero” process, which studies large loads of 75 megawatts or more together rather than one at a time. The first hard gate has now passed: the deadline for Batch Zero applicants to submit required technical studies and documentation was July 10, and ERCOT says it will notify applicants of their inclusion in the initial study in August, with a final transmission plan for the batch expected in the fall of 2027.
Batch Zero and the cost-allocation review both implement Senate Bill 6, the 2025 law that gave the PUC authority over interconnection standards, disclosure requirements and financial commitments for large loads. Officials say the batch approach protects reliability and supports economic growth while ending a project-by-project review that had grown “lengthy and repetitive.”
The distinction that matters for Texans is who ultimately pays and what the state gets in return. Projects that add their own generation lighten the load on the shared grid; ones that simply draw from it push transmission and reliability costs toward everyone else.
Data-center developers and their allies argue the industry is a generational economic prize, bringing tax base, construction jobs and demand that can justify grid investment the whole system uses. Consumer advocates and many local officials counter that ordinary customers should not subsidize private infrastructure for the world’s largest technology companies, the concern Abbott’s directive is built around. Both camps will read the July 17 memo closely for how far the agencies believe their existing authority reaches — and where they say only the Legislature can act.